- The DJ wins 0.62% while operators discount possibilities for cutting fees of the Fed in June.
- Trump’s soft tone on Commerce with China drives a risk rally about 40,000.
- The gold rises above $ 3,300 while the yields fall despite stronger American economic data.
The industrial average Dow Jones (DJIA) recorded profits of more than 0.62% as investors became optimistic about the possibility that the Federal Reserve (Fed) could cut interest rates at its June meeting, amid increasing concerns about a recession in the United States (USA). This, together with an improvement in the appetite for the risk due to the provision of the US to reach an agreement with China, led to the DJs near the 40,000 mark after bouncing from a minimum daily of 39,200.
The hopes of a change of the Fed and the insinuations of a thaw in the trade between the US and China raise Wall Street, although the resistance stalks near historical maximums
On Wednesday, US President Donald Trump, adopted a moderate position towards China in commercial conversations in Beijing and even spoke about reducing tariffs on his products, an opening signal towards reaching an agreement. However, US Treasury Secretary Scott Besent said: “There is no unilateral offer from Trump to cut the tariffs to China.”
During the night session for North American operators, the spokesman for the Chinese Ministry of Commerce, He Yadong, said there were no commercial conversations with the US and requested the cancellation of the “unilateral” tariffs.
The US economic data raised the mood of the market, since the labor market presented a report aligned with the forecasts, while the requests for durable goods increased drastically in March, driven by aircraft orders.
An improvement in the mood of the market failed to weigh on gold prices, with precious metal back over $ 3,300, rising 1%, backed by the fall in the yields of the US Treasury bonds, since the 10 -year bonus coupon collapses seven basic and a half points up to 4.309%.
Dow Jones price forecast
The Dow’s bassist trend is maintained, but buyers are winning some impulse. Recently, the US president, Donald Trump, said they had conversations with China in mourning, which caused a jump in the DJia, which reached a daily maximum of 40,002.
If buyers push the Dow beyond 40,500, this could pave the way to challenge the peak last week of 40,790. The key resistance is in front of 41,000. On the contrary, if the sellers carry the index below the minimum of April 23, 39,486, look for a test of the maximum of April 22, 39,271 to close the gap observed between April 22 and 23.
Dow Jones Faqs
The Dow Jones Industrial Avenge, one of the oldest stock market indexes in the world, consists of the 30 most negotiated values in the United States. The index is weighted by the price instead of capitalization. It is calculated by adding the prices of the values that compose it and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, also founder of the Wall Street Journal. In recent years it has been criticized for not being sufficiently representative, since it only follows 30 companies, unlike broader rates such as S&P 500.
There are many factors that promote the Dow Jones Industrial Average (DJIA) index. The main one is the added performance of the companies that compose it, revealed in the quarterly reports of business benefits. The American and world macroeconomic data also contribute, since they influence investor confidence. The level of interest rates, set by the Federal Reserve (FED), also influences the DJia, since it affects the cost of credit, on which many companies depend largely. Therefore, inflation can be a determining factor, as well as other parameters that influence the decisions of the Federal Reserve.
Dow’s theory is a method to identify the main trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Avenge (DJIA) and the Dow Jones Transportation Average (DJTA) and just follow the trends in which both move in the same direction. The volume is a confirmation criterion. The theory uses elements of maximum and minimum analysis. Dow’s theory raises three phases of the trend: accumulation, when intelligent money begins to buy or sell; Public participation, when the general public joins the trend; and distribution, when intelligent money abandons the trend.
There are several ways to operate with the DJ. One of them is to use ETF that allow investors to negotiate the DJ as a single value, instead of having to buy shares of the 30 companies that compose it. An outstanding example is the SPDR Dow Jones Industrial Avenge ETF (day). Future contracts on the DJ allow the specular operators about the future value of the index and the options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Investment funds allow investors to buy a part of a diversified portfolio of DJ values, which provides exposure to global index.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
